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FAIR Canada Newsletter
September 2010 |
FAIR Canada Granted Leave to Intervene in Supreme Court of Canada Reference |
FAIR Canada supports the proposed national securities legislation that will establish the Canadian Securities Regulatory Authority (CSRA) and has been granted leave to intervene in the Canadian Government's reference to the Supreme Court of Canada on the constitutionality of the proposed national legislation.
Current System Not Providing Adequate Investor Protection
"The announcement by Finance Minister Flaherty of the proposed Canadian Securities Act and the Supreme Court of Canada ("SCC") reference are major steps forward," said Ermanno Pascutto, Executive Director of FAIR Canada. "We have debated the establishment of national securities regulator for the past five decades. Despite the numerous reports and compelling arguments in favour of a national regulator, limited progress has been made. We believe that championing a national commission will serve the interests of Canada and investors in the long-term."
FAIR Canada's primary concern is whether a national commission will provide better and more consistent investor protection across Canada. "The current balkanized system of provincial and territorial regulators has simply not delivered an adequate level of investor protection for Canadians," said Mr. Pascutto. "The current system with 13 provincial and territorial regulators favours consensus amongst regulators at the expense of the protection of retail investors. In practice, this means that policy initiatives that could better protect retail investors face unacceptably long delays and are typically watered down, if they are pursued at all; even worse, individual provinces (especially the larger provinces) can and do simply "veto" policy change. This precludes serious discussion at the national level of issues that are particularly sensitive to some jurisdictions and sacrifices sound regulatory policy for the benefit of specific industries and specific provinces."
Decentralized Regime
FAIR Canada is also pleased that the federal Government has committed to an agency with a strong network of local offices which are authorized and empowered to make key decisions that reflect local market needs. "Provincial commissions have been sensitive to local issues and local market conditions," said Mr. Pascutto. "The Chinese have a saying, 'the mountains are high and the emperor is far away.' A national securities commission with most of its resources located in Ottawa or Toronto runs the risk of not being effective in all regions of the country. The 'local touch' must be preserved with a meaningful presence in each part of Canada. A decentralized national commission is needed in a country like Canada, which is geographically vast and has distinct regional characteristics."
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